Second Charge Mortgages

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

A Second Charge mortgage is, as the name suggests, a separate and additional mortgage to the homeowner’s main (or first) mortgage.

Second charge mortgages (sometimes known as ‘Homeowner Loans’) are loans which are secured against the borrower’s residential property, and as such, are available only to homeowners. In common with remortgages, second charge mortgages are sometimes used by homeowners to raise money.

When considering a second (‘further’) advance, the lender will take into account the value of the borrower’s home, less any mortgage owed on it. The difference between the two amounts is known as ‘equity’ and provides the lender with security against the loan. If for example, the home is estimated to be worth £300,000 and the amount remaining to be paid on the mortgage is £100,000, the equity is £200,000. In addition to the amount of equity that’s available, the lender will consider the borrowers’ ability to service both mortgages if interest rates were to rise.

By taking a second mortgage, the homeowner will have two mortgages on his or her home. In common with a first mortgage, the borrower’s home will be at risk if he or she fails to keep up the mortgage payments.

When the property is sold, or the homeowner moves to a new home, the amount owing on the first mortgage must be repaid in full before anything is paid off the second mortgage.

Generally speaking, lenders charge a higher rate of interest on second charge mortgages than they do on first or main mortgages. The rate of interest (which may be fixed or variable) can also depend on the size and term of the loan, the homeowner’s credit rating and the amount of equity that exists in the home.

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Mortgage Requirements

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Second Charge Mortgages

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

A Second Charge mortgage is, as the name suggests, a separate and additional mortgage to the homeowner’s main (or first) mortgage.

Second charge mortgages (sometimes known as ‘Homeowner Loans’) are loans which are secured against the borrower’s residential property, and as such, are available only to homeowners. In common with remortgages, second charge mortgages are sometimes used by homeowners to raise money.

When considering a second (‘further’) advance, the lender will take into account the value of the borrower’s home, less any mortgage owed on it. The difference between the two amounts is known as ‘equity’ and provides the lender with security against the loan. If for example, the home is estimated to be worth £300,000 and the amount remaining to be paid on the mortgage is £100,000, the equity is £200,000. In addition to the amount of equity that’s available, the lender will consider the borrowers’ ability to service both mortgages if interest rates were to rise.

By taking a second mortgage, the homeowner will have two mortgages on his or her home. In common with a first mortgage, the borrower’s home will be at risk if he or she fails to keep up the mortgage payments.

When the property is sold, or the homeowner moves to a new home, the amount owing on the first mortgage must be repaid in full before anything is paid off the second mortgage.

Generally speaking, lenders charge a higher rate of interest on second charge mortgages than they do on first or main mortgages. The rate of interest (which may be fixed or variable) can also depend on the size and term of the loan, the homeowner’s credit rating and the amount of equity that exists in the home.

MORTGAGE ENQUIRY FORM

Your Address

Mortgage Requirements

Have you found a property

Yes

No

Income and Status

Marketing Information

Sensitive Personal Data

We may need to collect sensitive personal data including information about your health, ethnic origin, or criminal prosecutions from third parties such as employers and credit reference agencies, fraud prevention agencies and other similar organisations in order to provide you with the services, for example where you require advice on protection or mortgage products.

If you consent to us obtaining your sensitive personal data from third parties referred to above for the purpose of providing you with the services, and sharing it with third party providers and Positive Solutions (Intrinsic) to obtain quotes on your behalf, for example where we are providing you with protection or mortgages advice as part of our services, please tick this box.

Submit your Information

From time to time, we would like to contact you with details about our services, products, business updates and events. If you consent to us contacting you for this purpose please tick to say how you would like us to contact you:

How should we contact you?

Email

Telephone

Post

Yes please, I'd like to hear about offers and services.

No thanks, I don't want to hear about offers and services.

Please tick this box to confirm you have read and understood our privacy policy.

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Matthew Burman

Positive Solutions is a trading style of Quilter Financial Planning Solutions Limited, which is authorised and regulated by the Financial Conduct Authority. Registered as a Limited Company in England and Wales No. 3276760. Registered Office: Riverside House, The Waterfront, Newcastle upon Tyne. NE15 8NY VAT registered No. 386 1301 59. The Financial Conduct Authority does not regulate advice on commercial and agricultural mortgages, buy to let mortgages, or advice on some tax matters.

The information and content within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.